Exhibit 99
CONTACTS:
Rick Ackel
EVP, Chief Financial Officer
Paige Bombino
Investor Relations
(408) 964-3610
FOR IMMEDIATE RELEASE
SANMINA-SCI ANNOUNCES THIRD QUARTER 2003 RESULTS
SAN JOSE, CA (JULY 21, 2003) -- Sanmina-SCI Corporation (NASDAQ NM: SANM), a
leading global electronics manufacturing services (EMS) company, today reported
financial results for its third quarter and nine months ended June 28, 2003. The
corresponding GAAP financial information and a reconciliation from pro forma to
GAAP is contained in the attached financials and is available on the Investor
Relations section of our website at www.sanmina-sci.com.
THIRD QUARTER FISCAL 2003 HIGHLIGHTS INCLUDE:
- REVENUES OF $2.65 BILLION INCREASED 8.4% COMPARED TO Q2:03 AND
INCREASED 1.2% OVER Q3:02
- PRO FORMA INCOME FROM OPERATIONS UP 48.3% VERSUS Q2:03 AND UP 30.4%
VERSUS Q3:02
- PRO FORMA CASH EPS OF $0.01 IN LINE WITH COMPANY GUIDANCE
- CASH FLOW FROM OPERATIONS APPROXIMATELY $200 MILLION
- CASH CYCLE DAYS IMPROVE BY 7 DAYS TO 38 DAYS
SUMMARY OF PRO FORMA FINANCIAL RESULTS
(Excluding merger and integration, restructuring and other infrequent or unusual
charges. For the third quarter infrequent or unusual charges include cost of
reauditing the company's 2000 and 2001 financial statements, which was necessary
for the company to provide, audited historical consolidating guarantor financial
information. The nine months ended June 29, 2002 include results of operations
from SCI Systems as if combined as of the beginning of the period.)
(THOUSANDS, EXCEPT PER SHARE DATA) Q3:03 Q3:02 9MOS03 9MOS02
Revenues $2,648,907 $2,617,626 $7,629,421 $7,435,094
Operating margin 1.4% 1.1% 1.2% 1.2%
Operating income $38,362 $29,422 $88,288 $87,408
Net income (loss) $1,373 $2,956 ($1,244) $10,390
Cash net income $6,418 $9,026 $14,319 $29,150
Cash EPS - basic $0.01 $0.02 $0.03 $0.06
Cash EPS - diluted $0.01 $0.02 $0.03 $0.06
Sanmina-SCI Corporation
July 21, 2003
Page 2
SUMMARY OF FINANCIAL RESULTS ON A GAAP BASIS
(Includes merger and integration, restructuring and other infrequent or unusual
charges. The nine months ended June 29, 2002 include results of operations from
SCI Systems beginning with the close of the merger on December 6, 2001.)
(THOUSANDS, EXCEPT PER SHARE DATA) Q3:03 Q3:02 9MOS03 9MOS02
Revenues $2,648,907 $2,617,626 $7,629,421 $6,159,328
Operating margin 0.7% 0.7% (0.2%) (1.2%)
Operating income (loss) $17,997 $17,856 ($12,478) ($74,766)
Net income (loss) ($12,174) ($4,994) ($51,504) ($89,531)
EPS - basic ($0.02) ($0.01) ($0.10) ($0.19)
EPS - diluted ($0.02) ($0.01) ($0.10) ($0.19)
ASSET MANAGEMENT DRIVES IMPROVED FINANCIAL PERFORMANCE
For the third quarter ended June 28, 2003, Sanmina-SCI reported revenues of
$2.65 billion, an increase of 8.4% from $2.44 billion in the second quarter
ended March 29, 2003, and an increase of 1.2% from $2.62 billion in the third
quarter last year. Pro forma income from operations for the third quarter ended
June 28, 2003 rose 30.4% to $38.4 million, compared to $29.4 million in the same
period a year ago. Pro forma income from operations increased 48.3% from the
prior second quarter ended March 29, 2003.
On a pro forma basis, the company reported net income of $1.4 million, or $0.01
cash earnings per share for the third quarter ended June 28, 2003. This compares
to net income of $3.0 million, or cash earnings per share of $0.02 in the same
period last year. Pro forma financial results do not include merger,
integration, restructuring or other infrequent or unusual charges.
Cash provided by operations was approximately $200 million. In the third
quarter, financial management ratios strengthened over the second quarter as
cash cycle days improved to 38 days, inventory turns increased one full turn to
9.6, and DSO decreased to 52 days.
At June 28, 2003, the company reported $1.6 billion in cash and short-term
investments. At quarter-end, the company reported a current ratio of 2.3,
working capital of $2.6 billion and shareholders' equity of $3.4 billion.
On July 8, 2003, Sanmina-SCI called for redemption on August 7, 2003 of all of
its 4 1/4% Convertible Subordinated Notes due 2004. The aggregate principal
amount outstanding of the Notes is approximately $263.6 million. Taking this
into account, since September 2002 the company has reduced its shorter term bond
debt coming due in 2004 and 2005 by approximately $635 million, or approximately
50%.
CUSTOMER-FOCUSED STRATEGY DELIVERS RESULTS
Jure Sola, Chairman and Chief Executive Officer of Sanmina-SCI, said, "In
addition to strong asset management, we believe the ongoing improvement in our
financial performance reflects our unyielding focus on providing our customers
with innovative technology, world-class manufacturing and superior customer
service.
"During the quarter, we announced a number of initiatives to support our
customers by providing them with cost-effective technology solutions and an
accelerated time-to-market. As part of this effort, we recently announced the
acquisition of Newisys, Inc., a developer of enterprise-class
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Sanmina-SCI Corporation
July 21, 2003
Page 3
servers for global technology companies. This acquisition advances our plan of
offering original design manufacturing (ODM) in market-specific sectors. By
seeking out these types of new leadership opportunities and investing in
advanced technology and processes throughout the supply chain, we are creating
value for our customers.
"As the market continues to stabilize, Sanmina-SCI is uniquely positioned to
expand its industry leadership due to our strategy of integrating our technology
and manufacturing expertise with our complete supply chain capabilities," Sola
concluded.
COMPANY OUTLOOK
Sanmina-SCI projects fourth quarter fiscal 2003 revenue to be approximately $2.6
billion to $2.75 billion, and cash earnings per share to be between $0.01 to
$0.03 before merger, integration, restructuring and other infrequent or unusual
charges.
PRO FORMA FINANCIAL INFORMATION
In addition to disclosing operating results determined in accordance with
generally accepted accounting principles (GAAP), Sanmina-SCI also provides pro
forma operating results that exclude certain items. Management utilizes pro
forma operating results as a performance measure and furnishes the information
in order to provide investors with additional information to analyze the
Company's operating results and facilitate period to period comparisons.
COMPANY CONFERENCE CALL INFORMATION
Sanmina-SCI will be holding a conference call regarding this announcement on
Monday, July 21, 2003 at 4:30 p.m. EDT (1:30 p.m. PDT). The access numbers are:
domestic 877-273-6760 and international: 706-634-6605. The conference will be
broadcast live over the Internet. Log onto the live webcast at
http://firstcallevents.com/service/ajwz384328177gf12.html. Additional
information in the form of a slide presentation is available by logging on the
Sanmina-SCI's website at www.sanmina-sci.com. A Replay of today's conference
call will be available for 48-hours. The access numbers are: domestic
800-642-1687 and international: 706-645-9291, access code: 1579482.
ABOUT SANMINA-SCI
Sanmina-SCI Corporation (NASDAQ: SANM) is a leading electronics contract
manufacturer serving the fastest-growing segments of the $125 billion global
electronics manufacturing services (EMS) market. Recognized as a technology
leader, Sanmina-SCI provides end-to-end manufacturing solutions, delivering
unsurpassed quality and support to large OEMs primarily in the communications,
defense and aerospace, industrial and medical instrumentation, computer
technology and multimedia sectors. Sanmina-SCI has facilities strategically
located in key regions throughout the world. Information about Sanmina-SCI is
available at www.sanmina-sci.com.
SANMINA-SCI SAFE HARBOR STATEMENT
The foregoing, including the discussion regarding the company's future
prospects, contains certain forward-looking statements that involve risks and
uncertainties, including uncertainties associated with economic conditions in
the electronics industry, particularly in the principal industry sectors served
by the company, changes in customer requirements and in the volume of sales to
principal customers, the ability of Sanmina-SCI to effectively assimilate
acquired businesses and achieve the anticipated benefits of its acquisitions,
and competition and technological change. The company's actual results of
operations may differ significantly from those contemplated by such
forward-looking statements as a result of these and other factors, including
factors set forth in the company's 2002 Annual Report on Form 10-K and 10-K/A
filed on
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Sanmina-SCI Corporation
July 21, 2003
Page 4
December 4, 2002 and June 18, 2003 and 10-Q and 10-Q/A filed with the Securities
Exchange Commission on May 14, 2003 and May 16, 2003.
- FINANCIAL TABLES FOLLOW -
-more-
Sanmina - SCI Corporation
Pro forma Consolidated Statements of Operations
(Excluding merger, restructuring and other infrequent or unusual charges)
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net sales $ 2,648,907 $ 2,617,626 $ 7,629,421 $ 7,435,094
Cost of sales 2,529,271 2,508,300 7,296,105 7,114,258
------------ ------------ ------------ ------------
Gross profit 119,636 109,326 333,316 320,836
Operating expenses:
Selling, general and administrative 79,648 78,608 240,165 228,403
Amortization of intangibles 1,626 1,296 4,863 5,025
------------ ------------ ------------ ------------
Total operating expenses 81,274 79,904 245,028 233,428
------------ ------------ ------------ ------------
Operating income 38,362 29,422 88,288 87,408
Other income (expense), net (36,312) (24,803) (90,144) (71,173)
------------ ------------ ------------ ------------
Income (loss) before provision for income taxes 2,050 4,619 (1,856) 16,235
Provision (benefit) for income taxes 677 1,663 (612) 5,845
------------ ------------ ------------ ------------
Pro forma net income (loss) $ 1,373 $ 2,956 $ (1,244) $ 10,390
Non-cash charges, net of tax 5,045 6,070 15,563 18,760
------------ ------------ ------------ ------------
Pro forma cash net income $ 6,418 $ 9,026 $ 14,319 $ 29,150
============ ============ ============ ============
Pro forma earnings per share:
Basic earnings per share $ 0.00 $ 0.01 $ 0.00 $ 0.02
Diluted earnings per share $ 0.00 $ 0.01 $ 0.00 $ 0.02
Cash pro forma earnings per share:
Cash basic EPS $ 0.01 $ 0.02 $ 0.03 $ 0.06
Cash diluted EPS $ 0.01 $ 0.02 $ 0.03 $ 0.06
Shares used in computing pro forma and cash per share amounts:
Basic shares 510,372 520,029 509,891 521,138
Diluted shares 513,952 525,626 509,891 529,609
Cash Basic shares 510,372 520,029 509,891 521,138
Cash Diluted shares 513,952 525,626 512,111 529,609
Sanmina - SCI Corporation
Consolidated Statements of Operations
(GAAP)
(in thousands, except for per share data)
(unaudited)
Three Months Ended Nine Months Ended
----------------------------- -----------------------------
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net sales $ 2,648,907 $ 2,617,626 $ 7,629,421 $ 6,159,328
Cost of sales 2,529,271 2,508,300 7,296,105 5,894,712
------------ ------------ ------------ ------------
Gross profit 119,636 109,326 333,316 264,616
Operating expenses:
Selling, general and administrative 81,348 78,608 241,865 209,203
Amortization of intangibles 1,626 1,296 4,863 4,025
Integration costs 1,889 -- 8,248 --
Restructuring costs 16,776 11,566 90,818 126,154
------------ ------------ ------------ ------------
Total operating expenses 101,639 91,470 345,794 339,382
------------ ------------ ------------ ------------
Operating income (loss) 17,997 17,856 (12,478) (74,766)
Other income (expense), net (36,167) (24,803) (64,393) (55,991)
------------ ------------ ------------ ------------
Income (loss) before provision for income taxes (18,170) (6,947) (76,871) (130,757)
Provision (benefit) for income taxes (5,996) (1,953) (25,367) (41,226)
------------ ------------ ------------ ------------
Net income (loss) $ (12,174) $ (4,994) $ (51,504) $ (89,531)
------------ ------------ ------------ ------------
Earnings (loss) per share:
Basic $ (0.02) $ (0.01) $ (0.10) $ (0.19)
Diluted $ (0.02) $ (0.01) $ (0.10) $ (0.19)
Shares used in computing per share amounts:
Basic 510,372 520,029 509,891 472,225
Diluted 510,372 520,029 509,891 472,225
Sanmina-SCI Corporation
Reconciliation of GAAP net income (loss) to proforma net income(loss)
and to cash net income
(in thousands)
Three Months Ended Nine Months Ended
--------------------------- ---------------------------
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Net income (loss) - GAAP basis $ (12,174) $ (4,994) $ (51,504) $ (89,531)
Net income (loss) related to SCI for Oct-Nov 2001 -- -- -- (146,010)
------------ ------------ ------------ ------------
Net income (loss) including SCI for entire period in 2002 (12,174) (4,994) (51,504) (235,541)
Reconciling items, net of tax:
Losses on operations in process
of being closed or pending -- -- -- 10,420
Gain on early extinguishment of debt (97) -- (17,253) --
Integration costs 1,266 -- 5,527 19,073
Restructuring and other costs 11,239 7,950 60,847 216,438
Reaudit fees 1,139 -- 1,139 --
------------ ------------ ------------ ------------
Pro forma net income (loss) without charges 1,373 2,956 (1,244) 10,390
Amortization, net of tax 1,089 829 3,260 3,215
Non-cash interest charges, net of tax 3,956 5,241 12,303 15,545
------------ ------------ ------------ ------------
Pro forma cash net income $ 6,418 $ 9,026 $ 14,319 $ 29,150
============ ============ ============ ============
Sanmina - SCI Corporation
Condensed Consolidated Balance Sheets
(in thousands)
(GAAP)
June 28, September 28,
2003 2002
-------------- --------------
(unaudited)
ASSETS
Current assets:
Cash and short-term investments $ 1,571,021 $ 1,163,674
Accounts receivable, net 1,579,542 1,394,515
Inventories, net 1,059,093 1,123,016
Deferred income taxes 243,418 312,184
Prepaid and other current assets 125,504 165,649
-------------- --------------
Total current assets 4,578,578 4,159,038
Property, plant and equipment, net 1,033,957 1,084,454
Goodwill and intangibles, net 2,203,729 2,148,827
Long-term investments 17,232 73,955
Deposits and other 80,886 51,783
-------------- --------------
Total assets $ 7,914,382 $ 7,518,057
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 5,129 $ 265,899
Accounts payable 1,459,538 1,279,451
Accrued liabilities and other 370,325 366,500
Accrued payroll and related benefits 151,772 142,139
-------------- --------------
Total current liabilities 1,986,764 2,053,989
Long-term liabilities:
Convertible subordinated debentures 1,360,963 1,523,010
Long-term debt 1,075,854 452,321
Deferred income taxes 21,900 17,184
Other 66,014 56,838
Total stockholders' equity 3,402,887 3,414,715
-------------- --------------
Total liabilities and stockholders' equity $ 7,914,382 $ 7,518,057
============== ==============
Sanmina-SCI Corporation
Forward Looking Guidance
Three Months Ended September 27, 2003
(in billions, except per share amounts)
Net sales $2.60 - $2.75
Pro forma cash earnings per share (1) $0.01 - $0.03
(1) Forward looking guidance for the fourth quarter ended
September 27, 2003 is provided only on a pro forma cash basis.
The comparable GAAP earnings or loss per share amount is not
accessible due to inherent difficulties in predicting certain
expenses and gains affecting GAAP earnings or loss, such as
the amount and timing of Sanmina-SCI's restructuring costs, as
well as as debt security repurchases, if any, that could
result in gains or losses reported in GAAP earnings.